Lowered Corn Forecast Still Strong

Despite a reduced forecast of corn production in the U.S., yields still look to be the highest on record and the second largest corn crop in history.

On Nov. 10, USDA’s World Agricultural Supply and Demand Estimates projected lower U.S. feed grains supplies for 2009/2010, reflecting the lower forecast of corn production. According to the report, corn production is forecast 97 million bushels lower than last month’s 13 billion bushel projection, with a 1.3 bushel-per-acre reduction in yield. The primary reason behind the reductions is undoubtedly the wet conditions throughout the majority of the Corn Belt. Despite the drop in yield from October, this yield will be the highest on record if realized. Total production will be the second-largest in history, only behind 2007.

U.S. corn exports are projected 50 million bushels lower than the October 2009 2.15 billion bushel projection, reflecting the slow pace of sales in the recent weeks and the abundant supply of corn and wheat from the Black Sea region. Barley exports are also projected lower this month, reflecting the slow pace of sales and shipments to date. U.S. sorghum exports remain unchanged at 140 million bushels.

Global coarse grain supplies for 2009/2010 are projected 2 million tons lower this month as the European Union’s (EU) mixed grain, barley and oat production is projected to increase as well as Kazakhstani barley production. Global corn production for 2009/2010 is lowered 2.8 million tons with reduced production for the United States, Brazil, the EU, Russia, Venezuela, and Canada.

World coarse grain trade is projected slightly lower this month, reflecting reduced prospects for U.S. corn and barley exports.